A MICROECONOMIC APPROACH TO INDUCED INNOVATION

Hans Binswanger-Mkhize

No 14152, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: Invention possibilities are reformulated using research processes which have a cost and different implications for rates and biases of technical change. In the comparative static model a firm has the choice to build a plant of existing design or to improve it by research. The firm maximizes present value over the lifetime of the plant. Research costs and present value of capital and labor costs influence research mix and rate and bias to technical change. Controversies in the literature of induced innovation are discussed in terms of the model. A rise in labor costs does not necessarily lead to a more labor saving bias.

Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers)
Pages: 49
Date: 1974
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Citations: View citations in EconPapers (73)

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Related works:
Journal Article: A Microeconomic Approach to Induced Innovation (1974)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:14152

DOI: 10.22004/ag.econ.14152

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